Exhibit
10.4


 


	
  DATE:

  	
   

  	
  December 18, 2009

  



 


SUBORDINATION AGREEMENT


 


The
undersigned is a creditor (the “Creditor”) of Primoris Services Corporation, a
Delaware corporation (the “Company”).  In
consideration of loans made or to be made, credit given or to be given, or
other financial accommodations afforded or to be afforded to the Company, on
such terms as may be agreed upon between THE
PRIVATEBANK AND TRUST COMPANY (the “Bank”) and the Company, the
Creditor agrees that all monetary obligations of the Company to the Creditor
except for (i) wages earned and (ii) other payments (such as
reimbursements and appropriate bonuses) to be made in the ordinary course of
the Company’s business and (iii) all obligations of the Company under the
Membership Interest Purchase Agreement by and among the Company, the
undersigned and other Sellers dated effective October     ,
2009 (the “Purchase Agreement”) except as evidenced by the Promissory Note (collectively,
except for the excluded items described in (i), (ii) and (iii) above,
the “Subordinated Indebtedness”) now existing or hereafter arising and
howsoever evidenced or acquired (the aggregate principal amount of such
Subordinated Indebtedness as of the date hereof being that amount outstanding
pursuant to that certain Promissory Note, in form attached hereto as EXHIBIT A, in the face amount of fifty-three million five
hundred thousand Dollars ($53,500,000) (the “Promissory Note”) of the Company
payable to the Creditor) shall be and remain junior and subordinate to any and
all obligations of the Company to the Bank (“Superior Indebtedness”) now
existing or hereafter arising, whether direct or indirect, secured or
unsecured, absolute or contingent, joint and several, and howsoever owned, or
acquired.


 


Without
limiting the generality of the foregoing, the Creditor further agrees with the
Bank as follows:


 


1(a).        Except as provided in Section 1(b),
so long as there is any “Default”, whether technical or monetary, on any
Superior Indebtedness no payment of principal or interest (notwithstanding the
expressed maturity or any time for the payment of principal on the


 


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Promissory
Note) shall be made on the Promissory Note except with Bank’s prior written
consent and the Creditor will take no steps, whether by suit or otherwise to
compel or enforce the collection of the Promissory Note, nor will the Creditor
use the Promissory Note by way of counterclaim, set off, recoupment or
otherwise as to diminish, discharge or otherwise satisfy in whole or in part
any indebtedness or liability of the Creditor to the Company.


 


1(b).        Upon the occurrence and continuance of any
Event of Default under the Promissory Note, the Creditor shall not be entitled to
accelerate outstanding obligations payable by the Company until 180 days after
the date that the Event of Default was triggered.


 


1(c).        The Company may, however, pay scheduled
principal (including scheduled prepayments of principal) and interest on the
Promissory Note as outlined in paragraph #2 of the Promissory Note without
obtaining written consent of the Bank, so long as no event of Default on
Superior Indebtedness has occurred, or will occur as a result of such payment,
and notwithstanding the provisions of Section 1(d) Creditor need not
give Bank notice of such payments..


 


1(d).        The Creditor must provide the Bank with
notice prior to a draw on the Subordinated Note.


 


2.             The Bank need not at any time give
the Creditor notice of any kind of the creation or existence of any Superior
Indebtedness, nor of the amount or terms thereof, all such notice being hereby
expressly waived.  Also, the Bank may at
any time from time to time, without the consent of or notice to the Creditor,
without incurring responsibility to the Creditor, and without impairing or
releasing the obligation of the Creditor under this agreement (i) renew,
refund or extend the maturity of any Superior Indebtedness, or any part
thereof, or otherwise revise, amend or alter the terms and conditions thereof, (ii) sell,
exchange, release or otherwise deal with any property by whomsoever at any time
pledged, mortgaged or otherwise hypothecated or subjected to a lien to secure
any Superior Indebtedness, and (iii) exercise or refrain from exercising
any rights against the Company and others, including the Creditor.


 


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3.             The Creditor without prior written
consent will not sell, assign, transfer, pledge or hypothecate any Subordinated
Indebtedness, or any part thereof, or agree to discharge or forgiveness of the
same so long as there remains any Superior Indebtedness except subject to and
in accordance with the terms hereof and upon the agreement of the transferee or
assignee to abide by and be bound by the terms hereof.


 


4.             The Bank shall provide the Creditor
with immediate notice upon an Event of Default under the Superior
Indebtedness.  Upon receipt of such
notice, the Creditor shall not accept any payments from the Company on the
Subordinated Indebtedness.  If the
Company does make a payment to the Creditor in violation of the prohibition
herein, all funds, the value of any property and any benefit received by the
Creditor in connection with such payment shall be returned to the Company
immediately upon demand by the Bank.


 


5.             The Creditor will cause all
Subordinated Indebtedness to be at all times evidenced by the Promissory Note
or notes of the Company and will cause all such notes to bear thereon a legend
substantially as follows:


 


“The indebtedness evidenced by this Note is
subordinate to any and all indebtedness, obligations and liabilities of the
maker hereof to THE PRIVATEBANK AND TRUST
COMPANY in the manner and to the extent set forth in that certain
Subordination Agreement with said Bank dated December 18, 2009, to which
reference is hereby made for a more full statement thereof.  The holder has agreed thereby without said
Bank’s written consent not to sell, assign, transfer, pledge or hypothecate
this Note.”


 


6.             This Subordination Agreement shall
be continuing and binding until written notice of its discontinuance shall be
actually received by you, and also shall continue to remain in full force and
effect until all Superior Indebtedness created or existing prior to the receipt
of such notice shall have been fully paid and satisfied.


 


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Each
and all of the promises herein contained shall be binding on the Creditor, his
or her heirs, legal representatives and assigns, and shall inure to your
benefit and the benefit of your successors and assigns.


 


 


	
  CREDITOR:

  	
   

  	
  BANK:

  
	
   

  	
   

  	
   

  
	
  Michael
  D. Killgore

  	
   

  	
  THE PRIVATEBANK AND TRUST COMPANY

  
	
  As
  Sellers’ Representative 

  	
   

  	
   

  
	
  By:

  	
  /s/
  Michael D. Killgore

  	
   

  	
  By:

  	
  /s/
  Steve Trepiccione

  
	
   

  	
   

  	
   

  	
  Its:

  	
   

  



 


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Primoris
Services Corporation hereby acknowledges receipt of a copy of the above
Subordination Agreement and agrees to be bound by the terms and provisions
thereof, to make no payment or distribution contrary to the terms thereof and
to do every other act and thing necessary or appropriate to be done or
performed by it in order to carry out the terms of the Subordination Agreement.


 


 


Dated:
December 18, 2009


 


 


PRIMORIS
SERVICES CORPORATION


 


	
  By:

  	
  /s/
  Brian Pratt

  	
   

  
	
  Its:

  	
  CEO

  	
   

  



 


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